Second Circuit affirms that the TCPA does not permit a party to unilaterally revoke consent to receive calls under a bilateral contract

The Second Circuit Court of Appeals denied a petition for a panel rehearing in Reyes v. Lincoln Automotive Financial Services, 861 F. 3d 51 (2d Cir. June 22, 2017) which serves to affirm the rule that a party to a bilateral contract may not unilaterally revoke his consent to receive calls under the TCPA.

The consumer, who had an automobile lease sued the finance provider (“creditor”) under the Telephone Consumer Protection Act (“TCPA”) alleging the creditor continued to call him after he had revoked his consent to receive calls. The consumer originally consented under the lease agreement to “contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems.” He claimed he later revoked this consent by a letter requesting “no telephone contact be made . . . to [his] cell phone.” The creditor ignored the request and continued to call him.

The Second Circuit acknowledged that other circuit courts and the FCC had previously determined that a consumer could revoke a prior express consent under the TCPA . But the other circuit courts and the FCC opinions addressed the question of whether a consumer who freely and unilaterally consented to be called could subsequently revoke his consent. The instant case presents a different question, which had not been addressed by the FCC or by any federal circuit court of appeal: whether the TCPA also permits a consumer to unilaterally revoke his or her consent to be contacted by telephone when that consent is given, not gratuitously, but as bargained-for consideration in a bilateral contract.

The consumer argued that the same principles that the FCC and the other circuits relied on applied to his situation as well. He argued that (1) under the common law definition of the term, which Congress is presumed to have adopted when it drafted the TCPA, any form of “consent” (whether contractual or not) is revocable by the consenting party at any time; and (2) permitting parties to revoke their consent to be called is consistent with the remedial purpose of the TCPA, which was designed by Congress to afford consumers broad protection from harassing phone calls.

The court agreed that when Congress uses a term, such as “consent,” that has “accumulated [a] settled meaning under … the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of th[at] term [ ].” And the text of the TCPA evidences no intent to deviate from common law rules in defining “consent.” “Consent,” however, is not always revocable under the common law.

Consent which is not given in exchange for any consideration, and which is not incorporated into a binding legal agreement, may be revoked by the consenting party at any time. But consent given as part of a legally binding agreement can become irrevocable. This rule derives from the requirement that every provision of a contract receive the “mutual assent” of every contracting party in order to have legal effect.

In the instant case, the consumer’s consent to be contacted by telephone, however, was not provided gratuitously; it was included as an express provision of a contract to lease the automobile. Under such circumstances, “consent,” as that term is used in the TCPA, is not revocable. Given the absence of express statutory language to the contrary, the court was not persuaded that Congress intended to alter the common law of contracts in this way.

The court also rejected the argument that a consumer may unilaterally revoke his consent to receive calls because the consent provision was not an essential term of the lease agreement. But the court held that “a contractual term does not need to be ‘essential’ in order to be enforced as part of a binding agreement.” Contract law permits parties to “bind themselves to any terms, so long as the basic conditions of contract formation (e.g., consideration and mutual assent) are met.” So, the Court concluded, a party who has agreed to a particular term in a valid contract cannot later unilaterally declare it to no longer apply simply because the contract could have been formed without it.

Written by James Noonan

Jim is a founding partner of Noonan & Lieberman. Jim has more than 25 years of experience in civil litigation on behalf of creditors, servicers, business and real estate owners.